ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms
Granger Ltd contracted with Hale Co. The contract names a particular arbitration institution's rules and says the tribunal will have three arbitrators, one chosen by each party and the third by those two. Hale Co refuses to appoint its arbitrator. Which answer best describes how the appointment problem is normally resolved?
The agreed institutional rules or arbitration law normally provide a default appointment mechanism, such as an institution or court appointing the arbitrator. A refusal by one party does not void the agreement or let the other party choose the whole tribunal.
- AThe agreed rules or the relevant arbitration law provide a default appointing mechanism, such as an institution or court appointing the arbitratorCorrect
- BThe arbitration agreement automatically becomes void
- CGranger Ltd may appoint all three arbitrators itself without any procedure
- DThe dispute must be settled by mediation instead
Explanation
Institutional rules and arbitration laws normally supply a default mechanism so that one party cannot frustrate the process by refusing to appoint. The agreement does not become void, and a party cannot freely pick the whole tribunal unless the rules allow it. Mediation is not substituted.
Did you get it right without looking?
One question tells you little. A timed set on Alternative dispute resolution mechanisms shows your real accuracy, how long you take and where you lose marks.
More Alternative dispute resolution mechanisms questions
- Eta Ltd and Theta Ltd have an arbitration clause in their contract. Which statement about the arbitration process is correct?
- Gamma Co's managing director says the company should choose ADR over litigation mainly because the dispute concerns commercially sensitive i…
- Which of the following is an advantage of arbitration over litigation for parties to an international commercial contract?
- Two companies, one in Brazil and one in Germany, have a dispute over late delivery of goods. Their directors meet directly, without any thir…
- A contract between Gantry Co and Holm Co contains a clause requiring the parties to attempt mediation before starting any court proceedings.…
- Two companies in different countries signed a supply contract containing a clause that sends any dispute to arbitration. A dispute arises an…